Stocks Close Weak On Inflation, Policy Tightening Fears

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Stocks closed lower on Wall Street on Tuesday as concerns about soaring inflation and looming policy tightening by the Federal Reserve rendered the mood bearish.

The major averages all ended on a negative note despite recovering well from an early setback. The Dow, which plunged to 32,752.34 in early trades, ended the session with a loss of 222.84 points or 0.67 percent at 32,990.12.

The S&P 500 drifted down 26.09 points or 0.63 percent to 4,132.15, while the Nasdaq, which managed to spend some time in positive territory during the session, ended down 49.74 points or 0.41 percent at 12,081.39.

The Dow posted a small gain in the month, while the S&P 500 ended little changed, and the Nasdaq shed about 2.1 percent.

In a speech at the Institute for Monetary and Financial Stability in Frankfurt, Germany, Federal Reserve governor Christopher Waller said that he favored 50 basis point hike at every meeting until there is a substantial reduction in inflation.

In U.S. economic releases today, a report released by the Conference Board on Tuesday showed a modest decrease in U.S. consumer confidence in the month of May.

The Conference Board said its consumer confidence index dipped to 106.4 in May from an upwardly revised 108.6 in April. Economists had expected the consumer confidence index to drop to 104.0 from the 107.3 originally reported for the previous month.

According to a report released by MNI Indicators, Chicago-area business activity unexpectedly grew at a faster rate in the month of May, rising to 60.3 in the month, from 56.4 in April. The increase surprised economists, who had expected the business barometer to dip to 55.0.

Johnson & Johnson, Honeywell International, Boeing and 3M shed about 2 to 2.8 percent in the session.

Alphabet gained more than 1.5 percent, while Facebook, Microsoft and Apple ended with modest losses.

Merck, Coca-Cola, Cisco Systems, American Express, JP Morgan Chase, Visa, Caterpillar and McDonalds also ended notably lower.

Energy stocks shed ground after oil prices pared early gains and drifted lower on reports some OPEC members are in favor of suspending Russia's participation in the oil-production deal.

In overseas trading, European stocks closed weak on Tuesday, weighed down by concerns about rising inflation and fears about imminent interest rate hikes by global central banks. A surge in bond yields following a senior Fed official calling for several more rate hikes to combat ballooning inflation weighed as well.

The pan European Stoxx 600 slid 0.72 percent. Germany's DAX tumbled 1.29 percent and France's CAC 40 ended 1.43 percent down, while the U.K.'s FTSE 100 edged up marginally.

Stock markets across the Asia-Pacific region turned in a mixed performance during trading on Tuesday. Japan's Nikkei 225 Index dipped by 0.3 percent, while China's Shanghai Composite Index jumped by 1.2 percent.

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